Former Halkbank executive resigns as head of Istanbul stock exchange

He added, “Ankara has been unable to read the US system and understand how it works for a very long time, and this is just the latest example.”

Piccoli said Atilla’s resignation could also be a gesture to show key financial institutions in Turkey are changing course amid efforts to gain credibility among investors and attract foreign capital.

In recent weeks, Turkey has been one of the hardest hit emerging market economies under pressure from rising oil prices and global bond yields. Driven primarily by external developments, the Turkish lira slid to its lowest point since late December, trading at 7.70 per US dollar at 7 p.m. Istanbul time Monday.

Coupled with domestic developments such as rising double-digit inflation and speculation Albayrak may return to an economic management role in the Turkish government, the Turkish economy is highly exposed to financial pressures currently weighing on emerging markets.

Higher day trading traffic and speculative bets have also rattled Turkish stocks, as seen with the 5% rise in Halkbank’s stock Monday morning following Atilla’s resignation. The stock ended the day slightly negative, trading at 5.39 liras per share, down from a peak of 5.49 liras.

Atilla’s departure comes as Borsa Istanbul’s owner, the Turkish Wealth Fund, plans an initial public offering of the exchange in 2022. An analyst who requested to remain anonymous said the resignation may also have been the result of government attempts to “micromanage” the exchange, which prompted him to step down.

Still, most analysts viewed the announcement Monday as an effort to “appease Washington” and the new administration under President Joe Biden. The Halkbank case, along with Ankara’s 2019 acquisition of Russian-made S-400 missiles, have been central concerns for US foreign policy circles tasked with US-Turkey relations.

In the past, Erdogan condemned Atilla’s conviction as “politically motivated” and as a ruling with “no respect for the law.” In the upcoming New York case, Halkbank faces charges of fraud, money laundering and sanctions busting offenses that could see the institution expelled from the international SWIFT banking system. If found guilty, the Halkbank ruling could send ripple effects through the Turkish economy that could trigger a broader recession.